Zambia

Prospects Weekly: Developing countries continued to capture a rising share of global financial flows in 2010

Developing countries continued to capture a rising share of global financial flows in 2010, a trend that became evident from the early-2000s. Resilience during the crisis and better growth prospects for emerging markets—built upon progress in capital-account liberalization and strengthened investment climates over the last decade—further increased the attractiveness of EM to international investors. Reflecting the relative strength of their economies, demand from developing countries accounted for much of the 15.7% increase in world trade volume growth in 2010. This was led by demand for capital goods—a sector of global activity still dominated by high-income countries, which buoyed their production recovery in 2010. The rise in global demand for capital goods and durable consumer goods has also led to a rebound in demand for inputs that feed these markets, including metals—supporting growth in low-income countries. China has been the chief driver of metals demand, eclipsing the OECD since 2009. http://www.worldbank.org/globaloutlook
The share of developing countries in global financial flows increased considerably in 2010, continuing a trend that began in the early 2000s. Progress in capital-account liberalization, improved macroeconomic conditions and a stronger investment climate, led financial markets to view developing countries as being increasingly less risky. The premium charged to developing country-borrowers has been declining, a process that the events of the past two years have accelerated. For example, the Euro Area turmoil of 2010 saw risk premiums on the debt of several high-income countries rise, while those of developing countries did not. Further, the resilience of developing countries during the crisis, plus their stronger growth prospects increased their attractiveness as a destination for financial (and real) investment. http://go.worldbank.org/EXJ0ROZUM0
Much of the increase in world trade in 2010 reflected rapidly growing demand from developing countries, particuarly for capital goods—a sector of global activity still dominated by high-income countries. Three quarters of the increase in high-income country exports during the first half of 2010 were sold to developing countries. With the start of recovery and a firming of demand, businesses began replacing depleted inventories, and consumers stopped holding back on some big-ticket outlays, such as autos. These factors supported the rebound of capital goods and consumer durables production, which account for the bulk of global trade. The surge in capital goods exports has been an important contributor to recovery. In the United States equipment and software spending contributed 1.2%, 1.5% and 1% to GDP growth in Q1-, Q2- and Q3, respectively (2010). http://go.worldbank.org/01Z6RAZZ90
Increases in the demand for capital goods and durable consumer goods also led to a rebound in demand for inputs that feed these markets, including metals—supporting recovery in low income countries. China has been the chief driver of metal demand over the past decade and during the recovery. Chinese apparent consumption surged 20% in 2009 and 10% in the first 10 months of 2010. Metal production has increased in step with demand, but supplies for a few metals have tightened, notably for copper and tin, and stocks declined in 2010. All other base metals remain in surplus and stocks are relatively high. High metal prices buoyed export revenues for low-income countries, including Zambia, where revenues rose by 45% in 2010 on higher copper prices. http://go.worldbank.org/DTOIJPZQG0

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Media Events for Development Campaigns

Using large international events to get attention for a development objective is a pretty good idea. Events like the Soccer World Cup are so called media events - events that capture the attention of a large audience, that break our routines, and unify a large scattered audience. Whatever team you were cheering for, you weren't the only one cheering for it, and didn't you feel like your team's friends were also your friends? This kind of mood - attention and a feeling of community - provides a great environment for campaigns that want to raise awareness about certain issues or that want to change norms and behaviors.

Evidence on Learning Matters: READ Trust Fund

By Emily Gardner, READ Trust Fund

It's been a busy year and a half for the Russia Education Aid for Development (READ) trust fund, since it launched in 2009 to further critical work on quality learning assessments. The program is gearing up for another productive year, working to move the pendulum forward on the global imperative to measure progress in learning. Evidence on learning matters and assessment is central to improving education effectiveness.

Better drug supply chains keep thousands more children alive

On April 21, a few days before World Malaria Day, we announced some very encouraging results from a pilot project in Zambia through which we were testing various improvements in the public sector supply chain for lifesaving drugs. What we had been trying to do, with support from DfID and USAID, was to remove bottlenecks and get key supplies like pediatric malaria drugs off the shelves in district storage facilities and out to patients in rural areas on time.

When private sector techniques--like hiring someone to plan drug orders based on actual consumption in rural public health centers--were used to strengthen the public sector supply chain, we saw that the availability of pediatric malaria drugs nearly doubled in rural health centers in the 16 pilot districts.

This is a very significant finding, as just 7 percent of children in rural Zambia receive first-line treatment for malaria within 24 hours of developing fever (Zambia National Malaria Indicator Survey, 2008). We estimate that if these techniques are scaled up nationwide, 27,000 children could be saved from malaria deaths between now and 2015—cutting child mortality from malaria by 37 percent in Zambia.

African ministers address financial crisis

At a recent press conference, three African finance chiefs chastised international credit rating agencies for failing to forecast the global financial crisis and challenged international financial institutions to do a better job of monitoring the global economy and of holding rich and developing countries accountable in the same way.

The Ministers from Zambia, Cote d’Ivoire and Tanzania spoke about the crisis and its effect on Africa. Mustafa Mkulo, Tanzania’s Minister for Finance and Economic Affairs, said:

"This crisis has come when African governments have taken broad based measures to reform their economies, followed by significant achievements. It is now threatening to wipe out our gains of the past ten years and disrupt all our plans for further progress."

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